Pruksa expects full-year revenue to beat target

Prasert Taedullayasatit, Pruksa director and chief business officer, said that after last year’s flood disaster, the company took some time to recover. It then recorded presales of Bt12.68 billion in the first half of this year, 44 per cent from townhouses, 26 per cent from detached houses, and the rest from condominiums.
The company has budgeted Bt4.7 billion to buy land to develop residential projects this year and next after spending Bt1.3 billion to acquire land in the first half. It will launch 26 new projects worth Bt18.2 billion in the current second half after launching 14 in the first six months.
That adds up to 40 projects worth Bt28 billion for the full year, a reduction from its business plan set early this year to launch 49 projects worth Bt34 billion.
Prasert said the company scaled down the number of new projects once it saw that presales and revenue would exceed its 2012 targets.
Pruksa plans to issue debentures worth Bt5 billion next month; Bt3.5 billion worth will mature in three and a half years, and Bt1.5 billion will carry five-year maturity.
Part of the funds raised will be used to pay back an existing debenture that will expire this year. “As a result, our debt-to-equity ratio will be 1.07:1 after issuing the debenture,” said Edward Cooper, director and chief finance and risk officer.
However, he accepted that the cost of financing would increase from an average of 3.8 per cent to 3.9-4 per cent as interest rates rise.
Prasert said the company was confident that its revenue would surpass the earlier estimate as it has a backlog – homes already sold and awaiting transfer to customers – worth Bt34.28 billion, of which Bt16.82 billion worth would transfer before the end of the year. This will drive revenue well over the estimate of Bt26 billion.
Meanwhile, the company’s net profit margin will increase from 14 per cent in 2011 to 15 per cent this year thanks to its business strategy to reduce expansion costs, he said.
He added that the property market had shown signs of recovering since the second quarter of this year, especially demand for homes priced lower than Bt5 million.
Demand for homes in areas hit by last year’s flood is only about 60 per cent of the level before the disaster. However, Prasert said he believed that the market would return to nearly 100 per cent of the normal situation in the second half, driving growth of the Greater Bangkok property market by 10-15 per cent to between Bt270 billion and Bt280 billion this year.